Things You Need to Know About Life Insurance
Having a life insurance policy is not that easy because you need to consider different aspects first. The most common of them is the fact that you are doubtful on the importance and significance of having a life insurance. But for individuals who think about their financial future in case of death of any family member, they consider getting a life insurance.
Aside from giving protection to you, life insurances also offer a opportunity to have a reaping dividend, built-in cash value and a tax-free investment. If you purchased it with due discretion, you can utilize it as a liquid cash to help you with your different needs.
Depending on the type of need, there are various types of policies that is customized to fit each these needs. You can also consider asking for an advice from a financial expert so that you may know what policy you really need by also considering the number of dependents you have.
There are two basic forms of life insurances: the whole life insurance and the term life insurance. There are two different terms for a term life insurance policy and these are the short-term or temporary life insurance. The term insurance policy can only cater to those individuals who died between the specified periods of time of the policy they have enrolled. But when the person insured gets to live beyond the time specified in the term insurance policy, he will not get any money at all.
Getting a short-term life insurance is cheaper compared to a whole life insurance and this is common to young individuals who have dependents and those who have a house or car loan. But the premium costs for this type of insurance gradually increases once the insured age since there is higher mortality risk when he grows old making the premium almost equal to that a whole life insurance.
There are two types of term insurances and these are the level term (decreasing premium) and the annual renewable term (increasing premium). The premium for a level term is high for the first years compared to that of a renewable term but it decreases in the later years.
If you want features like ingrained cash value and life protection, you are looking for the whole life insurance. The initial steep premiums of this type of insurance may exceed the insurance’s actual cost. The surplus you get from it or the cash value is added to a separate account that you may use for a tax-free investment to reap dividends or it can also give a level premium on the latter part. You are also guaranteed that you get the death benefit on the maturity or upon death of the insured aside from the cash value you have.